Loading summary
Transcript57 lines
- [00:00]
Hilah Haddad
Foreign.
- [00:04]
Michal Avram
You are listening to an art media podcast. Yonatan, what's your number this week?
- [00:11]
Yonatan Adiri
I'm replaying my number from last week, but in a different context. My number is three. That is three new medical schools opening in Israel this week. This is the first time in decades that Israel opens medical schools. This was a big hole in the medical system in Israel for quite some time. It was filled by the incredible ex Soviet Union Union immigration aliyah of the 90s. And as that sort of wanes down, this was a matter of public debate. Over the last decade, the academic school year started for the first time with three new medical schools producing 220 new doctors each year.
- [00:48]
Michal Avram
My number is 28,524. And this is the number of jobs that have been created, I should say by the nearly 650 Israeli founded companies that are based in New York. By the way, these are estimated to contribute 13.3 billion in value to the state's economy. These are stats for just last year in 2024. And this is all according to a recent report from the U.S. israel Business Alliance. Timing for that, as you can probably guess, is aligned to this mayoral election that we've got going on this week in New York. I am giving you the win. I'm not even going to ask you.
- [01:29]
Yonatan Adiri
Because I was about to give you the win because of the importance of Mamdani and this is a benchmark, I mean, I guess that we're going to.
- [01:36]
Michal Avram
I think you're the winner and you think I'm the winner. Whatever.
- [01:38]
Hilah Haddad
It's.
- [01:39]
Michal Avram
It's a tie. It's a tie. It is 12pm here in Palo Alto.
- [01:51]
Yonatan Adiri
It is 10pm here in Israel. I just came back from Dasa and Karem. I spent the day there. A member of my close family went through a rather complicated medical surgery today. And I have to tell you, it's just incredible. Each and every time you get to engage with the Israeli healthcare system, you know, complex surgeries practically for free in a state of the art hospital. Robot surgery, you know, the da Vinci robotic surgery system implemented, come in at 12:30. By three you'll go into the surgery room, around half past five you'll get out. And the funny thing this time it's because Israeli healthcare system is so digital, we have this type of doordash thing. It seems right now when you leave your loved ones as they go into, you know, the kind of clean room, you can't just go with them. It opens a window, you get a link, you open a window and it actually tells You. The patient has been through anesthesia. He's now in surgery. He is recuperating. The doctor will be with you in 15 minutes. Incredible. So I guess that's sort of my motivation for my number this week. But, yeah, it's a miracle. I care deeply about the public service here and dedicate my life to it. This is a public system. 70% of Israelis don't even pay. And it's incredible to see the coexistence, the level of kind of, you know, step into the hospital and suddenly there are Arab doctors, Arab nurses, Russian nurses, Ethiopian doctors, Jewish doctors, managerial roles that are completely blind to ethnicity. It is absolutely a marvel from that perspective as well. But left with a lot of optimism on how Israel, you know, doesn't need to look farther than its hospitals as to how, you know, you can reach this type of harmony within the society, which I think is doable.
- [03:41]
Michal Avram
I, by the way, have an uncle who's been an ambulance driver in Jerusalem for probably the last like 30 something years and is about to retire finally. And I have so much respect for him, for his colleagues, for. And it's like you said, you see the incredible diversity of Israel, which so many people here do not realize at all, and that coexistence which does take place in certain environments, including in the healthcare sector. So hopefully more on that in an upcoming episode. There has been a lot going on in Israel in the last 24 to 48 hours, shall we say? I do want to just really quickly highlight something on the ceasefire and some economic projections that I came across in the last few days. And that's a report from Goldman Sachs on kind of the broader recovery if the ceasefire holds. What I was really struck by was that the emphasis of this report that they came out with was all on the labor supply and basically the impact of the last two years on both some of the constraints, of course, on Palestinian labor coming into Israel and then of course also the reservists. Jonathan, I know you were also mentioning something on the workforce in Israel that you came across.
- [04:52]
Yonatan Adiri
Yeah, there's an OECD report that was commissioned by the Ministry of Finance. It is an independent report that was published and there highly optimistic about the Israeli economy over the next decade. There are a couple of assumptions there related to demographic growth, kind of not plateauing, but at least getting a bit more reasonable. This demographic growth makes it really, really hard to keep up both in healthcare and transportation and others. But the notion of a four and a half million people labor force out of 10 million, where does that Go. What does it entail for Israel in terms of productivity was also part of the OECD's main focus and I have to say on a comparative basis, which is how these reports are right, Like Goldman and oecd, they benchmark Israel against Germany, France, Italy, uk and either they're doing really bad and they are, or Israel's like really doing really well and is on the up. And I guess it's a bit of both.
- [05:47]
Michal Avram
And of course there's a ton of attention right now given this recent ultra orthodox protest in Israel about mandatory conspiration. There is a broader economic question here which has been simmering and boiling over for many, many years, which is the participation in the workforce and those are huge issues. Today's conversation though, we're speaking with Hilah Haddad. She's an aerospace engineer and entrepreneur who has worked on various defense related projects in Israel, also on the transportation side. And she brings a really unique perspective as someone who has done this work both on the government side and now on the private sector side as an entrepreneur. One of her prior roles was serving as the Director general of the Ministry of Innovation, Science and Technology and was really focused partly on bridging this gap. So we're going to speak to her about Israel's space program, some of the history there and how it's shifting its strengths and weaknesses over the years and why this is so critical not just to national security, which is kind of the obvious angle here, but also to the continued diversification of the innovation sector more broadly.
- [06:55]
Yonatan Adiri
Yeah, Hilah is a very unique figure in Israel. An aerospace engineer, female aerospace engineer. It's a small group in Israel, elite group, but small, who's gone through all the landmark points of space engineering in Israel, Iron Dome and then Arrow, then, you know, government roles. And now she is slowly unveiling previously stealth mode type space related company that she co founded and is leading. And I think it's something to watch for. And so we'll be talking to Hila on the general, I would say, space posture for Israel. Are we competitive? If so, where? Outside of defense and as well as her own thoughts on what she's trying to build, which I think is very, very exciting. It would be maybe a bit cryptic for the next week or two, but once it goes beyond stealth, it would be very, very clear what she's up to and I find that to be very, very exciting.
- [07:48]
Michal Avram
All right, well first as usual, let's do the Windex. This is our update on the what's your number index which tracks the performance of publicly traded Israeli based or founded companies. Yonatan onto this week's Windex. How are things looking over the last week?
- [08:07]
Yonatan Adiri
So overall, again in the green more or less on par with the NASDAQ and almost 1% above the S&P 0.82% in the green. The Windex. I think it's an interesting week because the type of companies we're seeing in the green and more more so the company in the red is not what you would expect. Dominating the green are still the Israeli DTC Digital, I would say front runners and fast movers. That's Monday.com On a fantastic rebound globally in Wix, Lemonade is topping the chart with above 15% increase in a week. The company Sword is announced crossing $1 billion in forced premiums. It is becoming a growing force within the overall insurance ecosystem in the US it's the seventh consecutive quarter of accelerated revenue growth and I think we should expect Q3 reports over the next 48 hours. And so there is an upbeat in the market. We've seen some realizations of prior positions after the long rally of the 12 trailing months. But I think it's back in the green for a reason. I'm excited about that.
- [09:13]
Michal Avram
All right, what's in the red?
- [09:15]
Yonatan Adiri
So in the red for the first time we're seeing a cyber stock, you know, really underperforming that is Veranis. Veranis is one of the first kind of new generation IPOs coming out of Israel, shedding 43.5% almost half of its market cap over one week.
- [09:33]
Hilah Haddad
Wow.
- [09:33]
Yonatan Adiri
The company actually issued its Q3 report. Lowering its projections. Seems to be something that's grinding to a halt when it comes to on prem and you know, when everybody's shifting to AI cyber. We saw the Palo Alto acquisition. The market seems to say you have a great business. 700 million in revenue on the 12 trailing months, slightly negative on the profit. It's not going to grow as fast. So we're cutting the premium at 43.5%. We'll see if Aronis has it in the company and bounce back from this one. But quite a major blow for the company.
- [10:08]
Michal Avram
Well, if it doesn't have some kind of trick up its sleeve, it's probably a great acquisition target, I would say. But we're seeing certain concerns across the board. Last week was a really big week for tech earnings. We saw Amazon, Meta, Google, Microsoft, Apple, all of them report and all of those stocks went up except for Meta. But there are, you know, these kind of continued concerns of the Growing AI spend. Where is this all going? But also a lot of optimism still. The one thing I wanted to point it out, and this is not yet in the Windex, but will be in the future, is we finally saw Navon with Israeli founders. It's a US based company, but two Israeli founders at the helm go public last week. And there was a lot of questions on whether this would happen, when it would happen because of the government shutdown, which is still ongoing here. They did go forward with it. They managed to kind of, you know, get this through the sec and they went public. Huge win for Oren Zev, by the way, who we had on the podcast a few weeks back and who led a bunch of their rounds as a solo general partner. But the stock went down, I think 20% first day of trading. And, you know, that was unexpected. I do wonder if some of that was partly due to timing, to pushing this through at this moment and again going back to the scrutiny on, you know, in this age of AI, both the spend continuing to climb, but also how companies who are not squarely in the kind of, you know, real deep tech AI domain, how they capitalize on this wave and grow.
- [11:45]
Yonatan Adiri
I think overall we saw the via IPO and we said it didn't go crazy, didn't bounce up. It was more or less on a 5,6% margin in the green, but it could have also gone 5 or 6% in the red. You want to see IPOs that are priced well, you want to see IPOs that within the first couple of weeks are on the 5, 6% up or down. And I will say one thing for everybody to look for geopolitically over the next three to four weeks. I wrote a piece a couple of days ago in Hebrew. It's called Kaftat November, which is very odd. It's like the 29th of November that the day 1947 where the partition plan was voted for in the UN and oddly by the end of November, every few years, something big politically happens geopolitically for Israel. Jelani is in the White House next week. And in the middle of November, we're going to see Mohammed bin Salman at the White House. President Trump gave an interview yesterday to 60 Minutes stating that he does not expect Palestinian statehood to be able to stall Israeli Saudi normalization. Something is going on. By my analysis. There is a, you know, Kissinger used to have that word constructive ambiguity, right? You don't have to go for a normalization. Is there going to be a declaration of a process of normalization? If indeed there is a path of normalization that becomes public? Is it a date for an Netanyahu MBS meeting? Is it sort of just a path and a declaration of principles? I think the Shekel is going to go below three, but that is going to unleash incredible global investment in Israel. We're going to follow that.
- [13:20]
Michal Avram
You know, I'm very optimistic about the Israeli Saudi relations and where that could go. I think, you know, if when it happens, if it is in the near future, couldn't come at a better time because going back to AI and deep tech in particular, as all of these deals, all these investments are being formed, Israel stands to benefit here. So let's get on to our long play to the conversation with Hila. We are going to dive into space next. Moving on to our long play today we're interviewing Hilah Haddad, an aerospace engineer and entrepreneur who has played a critical role on various defense system and infrastructure projects in Israel, including the Iron Dome missile defense system. Welcome Hila.
- [14:08]
Hilah Haddad
Happy to be here.
- [14:10]
Michal Avram
So, okay, I want to start by asking you kind of a broad question just to put this in context for us. I think most of us know that the global space economy is booming, has been for a number of years. But you laid out in a recent column for the Jerusalem Post that the vast majority of that growth is coming from the private sector, which is new, not the way it used to be. Right. Not governments. And as you also pointed out in this piece of Israel is in many ways missing out on that growth despite having capabilities that only a few small countries have. So can you just again contextualize for us, explain the shift of this private sector growth and why it hasn't happened, at least on a larger scale and at least not yet in Israel.
- [14:58]
Hilah Haddad
So, you know, humankind, first we went out of the cave and then we went out of the continent and now we're too many on this Earth. And as Elon Musk said, we must go out from the Earth to be a multi planetary humanity. It's getting very crowded and in the last few years we see the humanity using space in order to bring resources back to Earth where we don't have enough or space or resources or energy or stuff like that. So this is why we see the space industry booming and it will continue growing exponentially. So we will need space in order to put some data centers because we will not have enough energy on Earth. We will need to mine resources on space. And that's why we see the shift from just defense and military usage of space to civil usage of space.
- [15:54]
Yonatan Adiri
Ida, I think you occupy a very unique kind of space in the Israeli ecosystem. As an engineer for Iron Dome for the Arrow system and then subsequently as a director general of one of the most most important, you know, government ministries in this space, can you share a bit sort of why does it take us so long?
- [16:11]
Michal Avram
And especially given everything you just said, why have we not seen that same kind of urgency private sector wise in Israel?
- [16:17]
Hilah Haddad
Israel was the eighth country to launch our own satellites and it's still one of the, I don't know, maybe 11 or 12, I'm not sure about the number, but only few countries that holds the ability to launch our own satellites. And we do that because it's an urgent problem. We really need to have the ability to do it by ourselves and all the supply chain of it. So we know for almost 20 years how to launch satellites and our satellites works for much more years than we planned them for. Why we don't do it in civil arena? Because in Israel it's not the urgent problem to solve and we had much more urgent national programs to do. We had the cyber, we had the smart mobility, we had quantum. But I think that now it's the time that we should do space.
- [17:09]
Michal Avram
And you're obviously you're trying to do your part to jumpstart this in the private sector side. So tell us a little bit about your company which is still in stealth mode but about to come out.
- [17:19]
Hilah Haddad
Our unique knowledge in Israel and unique know how is how to make very complex systems, technological systems for a small country. You cannot do a lot of tests, we cannot do a lot big laboratories. So when you don't have enough money and enough space, you do simulations and simulation tools and then there is a complex know how on how you validate them and after validating them, you use them in order to design the system. This is the way Irondom was developed in like a very small budget comparing to any other kind of systems. In the area of missiles, a full system test is a very, very, very expensive thing to do. So if you have a good simulator, you can do it in a very fast and low budget way. And we have the persons to do that in Israel.
- [18:16]
Yonatan Adiri
I think what we're hearing, Michal, and that resonates also from what we heard last week from Elad on Silic, this very unique Israeli way of leveraging scarcity to generate unique capacities. There's a lot of unique attributes to space. It's very cold. So if you want to build, as Hila said, you want to build a data center, you don't need all the cooling systems. The access to energy is more or less infinite. There's capacity to mine in space. I think what excites me about Hila's vision for her company is, you know, Ilan, you said it a couple of weeks ago when we met. So you may want to, you know, say it in your words. But it was something like, you know, when we, you know, went to discover land through the oceans, we had certain types of ships to discover and we had certain types of ship to do, certain dynamics. So once it got kind of like into trade with a lot of assets in the ocean, we needed totally different ships. Right.
- [19:09]
Hilah Haddad
We think on space as like any other economy, okay? And any kind of economy needed a full supply chain, okay? You cannot like send a bottle of water on the business class seat. It doesn't make sense. But today regarding space, that's what we do, okay? We use just rocket. It's the only methods to send stuff to space these days. So you pay for the 1 kg of astronaut, which is obviously the valuable asset that you can send to space. The same price for the kilo of the water he drinks or she drinks. So it doesn't make any sense. We think that the space economy will mature and become real economy. So we will need a full supply chain. So if we think about it like traffic management, we have few kinds of rockets these days. So the small one are like, you know, like a taxi cab. It can take you whenever you want. You just need to call to wherever you want. But it will cost you probably much more money. The other method is like the bus. And this is, I think, what's the great thing that Elon did with the Falcon 9, which is like going all the time, almost three times a week now. It's insane.
- [20:27]
Yonatan Adiri
Wow, really?
- [20:27]
Hilah Haddad
And it's. And it's very low price three times a week. But it's a ride share. So you don't really decide when to go and what will happen. With Starship, as I see it, it's like, I don't know, the train or a full trailer for the infrastructure. It's huge. It's 100 tons that it can lift to space. But the 100 ton is the 4% of payload. So it's a huge, huge rocket. And you need to burn a lot, a lot of fuel in order to get this hundred tons. But it opens a lot of possibilities so you can build infrastructure. If we talk about data center, it could lift a whole data center. It opens a lot of opportunities. But you Cannot do a supply chain sending every time 100 torn and you cannot send less. Okay, so you need like FedEx that is sending small stuff to space. There's a lot of things that you need to send to space which are not G sensitive. So fuel, obviously, everyone on space need fuel. So fuel obviously will be the first thing that we will deliver to space. But water, raw materials for the 3D printers going to space and satellites that will build in a non G sensitive way.
- [21:44]
Michal Avram
I think first of all, it's incredible to hear about all of these different applications. You know, when you talk about the space economy, I mean, it really is becoming so diverse and there's so much potential. A few years ago I did a story, the headline was Ladies who Launch. It really was sparked because despite all of this, again, diversification, the different applications and opportunities here, there was so much focus on what Elon Musk, Jeff Bezos, Richard Branson, handful of billionaires are trying to do in. Granted, what they're doing is much, much bigger than this. But a lot of the headlines were about people going into these, you know, private voyages, right? Which I think got a disproportionate amount of attention. And so I did this piece. And anyways, long story short, I want to hear from you not just about the woman angle here, but also just the entrepreneurial, you know, more broadly speaking, the excitement here, like, are you seeing in Israel more entrepreneurs wanting to go into this direction, male or female?
- [22:48]
Hilah Haddad
Effy, regarding the female perspective, it's still unique. You can say in Israel. I think you can see more at the States, but not a lot. And you said yourself, it's like, it's Jeff Bezos, it's Elon Musk, they're all men. It's a new economy again, established by a lot of men. And I think we should step forward and take it. But it will take time. I don't think in Israel we have enough entrepreneurs doing space. We don't have enough space tech in Israel. If you do space in Israel, you probably in the defense industries. And it's where the money is. Obviously the Israeli Space Agency should do something with that. On the last government again, when I was a director general, the Israeli Space Agency was under my ministry. We tried to do a big strategic plan and bring money into the civil kind of space. So we want to encourage VCs to put money in it. So they're doing what they can, but it's not enough. Not enough woman and not enough entrepreneur working on space in any kind.
- [23:52]
Michal Avram
So it's interesting, you're talking about how there is so much attention and resources being poured into defense and defense tech. But I do wanna you about defense, so I'm going to actually lean into that because you know, we've like brought up your background a few times and you played a role in the Iron Dome development which of course is all about national security. And so I just, I want to ask you what do you really see as the future here when it comes to national security issues? Both threats that are coming from the skies, of course, but also capabilities that are helping us to be able to detect those threats.
- [24:31]
Hilah Haddad
I think that the race that we see now is obviously the hypersonic race. The hypersonic missiles that will threaten us and the hypersonic missile that will try to intercept them. And it's very hard to develop an hypersonic system because the way to test them again, if we go back to how you test it, how you develop it, it's a very, very complex one because it's a very high energy. So in the west it's even more complex because you have regulation and safety issues. And we see that on China and in Russia it's easier to do those tests so you can iterate your system faster and to get to operating missiles sooner than later when developing hypersonic. So I think this is the next race regarding to what you said. But I think that the national security problems will not be in weapons in the future. I think that our civil systems, regarding water that we drink, regarding how we grow our food will be more and more technological. So there will be an easier way to make damage if you want to hurt your enemy. And all your enemy's food are relying on bioconvergence or ways to grow in unique ways their food. So you will try to get into their systems and make a mess. If you just shut down the energy of a country for 24 hours, you make much more damage than four hypersonic missiles. So against cyber will become harder and it will not be weapon as we think about it.
- [26:11]
Michal Avram
I kind of wish I hadn't asked you that question, but sorry for that, but okay, I'm going to. No, no, no, it's. That's fascinating and very troubling. I do want to ask you probably a more lighthearted question. One of your previous roles was heading up the Israel Highways Administration against the transportation role you were talking about earlier. And I want to ask you what is more complicated dealing with Israeli road infrastructure projects or sending stuff to space?
- [26:42]
Hilah Haddad
It's an easy question.
- [26:43]
Michal Avram
I knew it.
- [26:44]
Hilah Haddad
The Israeli road system is like the hardest things to deal with. I was amazed by that. I was four years in the Irondam team. We did an amazing thing. And then it was like very, very intensive four years for me. So I said, okay, enough. I was a young mom and I said, we intercept everything we can, but I cannot put my kids onto school in the morning. So I left the Ministry of Defense and went to the civil government and went to the Ministry of Transportation. And then I realized few very interesting things. System engineering is system engineering. It doesn't matter if it's a bridge or a missile or a train. It was all the same. So it was like very natural for me getting from missiles to infrastructures. Israel is very, very, very crowded. And the problem in Israel is that in the exact same hours, everyone from all around want to go to the exact place which named Tel Aviv. So even if you live like up in the north, you want to be at 9 in the morning in Tel Aviv, and if you live in the south, you want to be at 9 in Tel Aviv. And so there is no solution for this kind of problem.
- [27:55]
Michal Avram
I think part of the solution might be commuting to space in the future. So it sounds like you're working on it.
- [28:01]
Yonatan Adiri
Multi planetary Israeli.
- [28:02]
Hilah Haddad
I went to live in the Negev and I can tell you it looks like Mars. So I'm already there.
- [28:09]
Michal Avram
Hila, thank you so much. We appreciate you speaking with us.
- [28:13]
Yonatan Adiri
Thank you. Hila.
- [28:14]
Hilah Haddad
Thank you for that. Bye. Tada. Thank you.
- [28:17]
Michal Avram
Tada. Well, we began our show with the numbers of the week. And as usual, we're going to end with the words of the week. And this time it's a quote from Rabbi Kenneth Brander. He's the dean of a network of 32 Zionist religious institutions. And he said this in an interview with Jewish News Syndicate about last week week's ultra Orthodox protest in Jerusalem, which brought out an estimated 200,000 or so men to rally against the ultra Orthodox Haredi military draft. And here's what he said. Any group that thinks they can benefit from the country but not be part of the support fabric doesn't just weaken Israel, it weakens the security of Jews around the world. I know this is highly controversial, but I thought that was a pretty profound statement because it speaks not just to what's happening in Israel, but what's happening more globally. Globally for the Jewish community. By the way, going back to what we were saying earlier about demographics and what we've brought up repeatedly, including with Professor Eugene Kandel on a prior episode, there is a big demographic problem. It is not Just about security. This is about the workforce. It's about Israel's long term economic prospects. The ultra Orthodox population is expected to account for about a third of the overall Israeli population by 2050 or 2060, depending on projections. And this is something that Israel is going to need to figure out a way to address. Bottom line.
- [29:51]
Yonatan Adiri
Yeah, look, I think you know my perspective about sort of where Israel stands right now. It is the third founding moment of Israel, the ultra Orthodox peace. While many people think is should be front and center, you kind of solve that and everything else is downstream. I disagree with that. I think it's a dominant issue as is personal safety these days in Israel, as is the labor dynamics and the, I would say curse of Goliath that's starting to happen in and around this cycle of how big the Israeli bureaucracy has become. Just this morning we've had criminal arrests in the big national workers union which controls a significant part of the economy still. And so I think we are about to see over the next thousand days, I would say more or less three years. And as you know, I'm committed to that myself. That's sort of front and center of my life here in Israel is that change, that third moment of founding of Israel. It cannot continue to be that way. The ultra orthodox is one piece. It is just not sustainable and I don't think it will. My bet and sort of how we think about it is the new deal. It doesn't get solved by just drafting everybody violently. It's a new deal. It's a new deal of Israeli Arab social contracts. A new deal. When it comes to the ultra orthodox, it's a new deal. When it comes to the structure of the economy, it is a new deal and we'll finish with that. By the very foundation of how the education system is built here, it has exhausted itself. It is four times the budget from 20 years ago and average Israelis are doing are at the bottom third of OUCD performance. What I am excited about is that some of the Israeli politicians are outspoken ahead of the next election already saying this can no longer be incremental. That's just not going to work.
- [31:32]
Michal Avram
I'm glad we could solve in one episode both how to go to space and also Israel's system data centers in.
- [31:39]
Yonatan Adiri
Space and solve the ultra Orthodox challenge.
- [31:43]
Michal Avram
Exactly. We got it done. All right, that is it for today's show. Thank you for tuning in to Arc Media's what's your number? We hope you found it interesting and if you did, please be sure to like subscribe rate review you know the drill, but most importantly, please share it with others who you think will find it interesting. If you want to make suggestions or share your feedback, please reach out to us at what'syournumber@arc media.org.
- [32:13]
Yonatan Adiri
What'S your number is produced by Adam James Levine Reddy. Sound and video editing is by Martin Hugo. Our theme music is by Midnight Generation. I'm Yonatanadiri.
- [32:23]
Michal Avram
And I'm Michal Avram. See you back here next week.
- [32:25]
Yonatan Adiri
See you next week. We're going to solve some more problems.
- [32:32]
Michal Avram
This podcast offers general business and economic information and is not a comprehensive summary for investment decisions. It does not recommend or solicit any investment strategy or security.